FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

Many exotic exchange-traded funds (ETFs) have emerged over the years, ranging from ETFs that only hold closed-end funds, invest in obscure commodities or track industries that, honestly, nobody's particularly interested in.

The latest award for weirdest ETF idea goes to the Winklevoss twins, Cameron and Tyler (yes, those Winklevoss twins) for their Bitcoin ETF.

There's a new manifestation of capitalism on the rise: digital crypto-currency, exemplified by Bitcoin. And as the early adopters are betting, Bitcoin just might make money obsolete.

Bitcoin is two complicated concepts amalgamated into one simple, friendly technology. It's a digital, alternative currency - a type of money that lives only on the Internet - and a safe, instant way to make payments.

Bitcoin is fully "decentralized," meaning that no bank, not even the Federal Reserve, controls how many Bitcoins can be in circulation or can set new rules. The number of Bitcoins is strictly limited by math, with the number growing at a steady but slowing rate.

Bitcoins are dependent upon a highly encrypted algorithm which, at least theoretically, makes them impossible to manipulate. They're also entirely unregulated.

Given all the recent revelations about NSA hacking and the surveillance state we seem to live in, it's not hard to see why Bitcoin would appeal to some folks. It's not subject to the whims of central bank policies and remains next to impossible to confiscate, resulting in a more secure store of value than gold.

That's precisely why I thought it was odd that the Winklevosses (made infamous by the 2010 movie The Social Network) applied for SEC permission to create a Bitcoin ETF. Earlier this month, the SEC turned them down.

Created in 2009, the technology is still in its infancy. And while there are online exchanges where you can buy and sell the currency, they generally operate more along the lines of rare coin exchanges than the NYSE. Those are by no means bad things, but it wasn't hard to predict that the SEC would put the kibosh on the idea of a Bitcoin ETF.

Bitcoin represents a disruptive technology. Considering that its value can't be tied to inflation in the U.S., the government reserves in Japan or any other metric that affects the value of traditional currencies, it could be a stable medium of exchange. It's also reportedly impervious to theft, making it a lot safer than stuffing cash in your mattress, and some banker can't make off with it.

Bitcoin's fortress-like security also puts it largely beyond regulation, which is precisely why the SEC denied its approval for the ETF.

Still, bitcoin is an interesting investment idea and there are reputable, even if small, exchanges where you could buy a bit to tuck aside as a purely speculative bet.

For instance, there's the Winklevoss's own Gemini Exchange, which is one of the most prominent. It also happens to be the largest of the very few exchanges that operate in the U.S., which gives Bitcoin investors better protections than using overseas exchanges beyond the reach of many laws.

While the SEC may not have approved the creation of a Bitcoin ETF, we haven't heard the last of this idea.

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet